Q, I curious why you would consider Bacalhao a joke? The Portuguese under Gaspar Real were the major explorers of that particular area in the very early 1500s and named Trinity Bay and even Fogo is thought to be a corruption of the Portuguese word "fuego".

If the people of the area around Fogo, Twillingate, Morton's Harbour and Bacalhao, possibly the byes that built the boat in the first place, had sung the song and taken it into their lexicon, the more logical spelling for them would have been Bacalhao, after the island in their neighbourhood. Likewise, those from the Avalon Peninsula may have been thinking of the island closer to them and spelled it Baccalieu.

And for all we know, originator of the song could have been referring to the area of New World Island, just as easily as the area of Bay de Verde.